Vitamins giant Blackmores has been fined for falling foul of Chinese advertising regulations after making claims that it is Australia’s number one supplement brand.
The wellness brand was fined $69,000, according to Fairfax, after an ad that appeared in stores and online was found to breach Chinese advertising regulations because of the claim.
Information about the Blackmores breach came to light when a list of 11 companies found to have breached Chinese advertising regulations was released to state media to coincide with China’s Consumer Rights Day, reports Fairfax.
A spokesperson for Blackmores told SmartCompany this morning that at the time the ad appeared at the company’s Pudong Airport popup store, the company was unaware the wording was no longer allowed under a change in China’s advertising laws.
Blackmore says the ad used factually correct language that had previously been used across its other international marketing materials, and when the company was alerted to the issue, it pulled the ad in question.
“At the time, there were uncertainties in the market about the new Advertising Law and we were unaware that language used was no longer allowed,” the spokesperson says.
The company says it was quick to act after having the issue brought to its attention by China’s Administration of Industry and Commerce (AIC) body.
“As soon as we were made aware of the breach we removed the materials and the online posts where they were referenced. In recognition of our swift action and compliance with the AIC’s investigation, the penalty was reduced to the lowest level according to the penalties prescribed by the Advertising Law,” says the spokesperson.
“Blackmores takes its obligations seriously, and since the investigation has strengthened its procedures and ensures all advertising claims are subject to legal review.”
Regulation overseas a constant conversation
While the federal government is continuing to champion the opportunities for Australian businesses to trade in China, expanding your business overseas involves constant conversations with experts on the ground about regulatory and cultural requirements, says co-founder of baby products business b.box for kids, Dannielle Michaels.
The b.box business generates between 50 and 80% of its approximately $5.7 million in annual revenue from overseas markets, including Korea and China, and Michaels says the process of growing the business has involved taking the lead from the experts on the ground.
“For us, it’s really important that we partner with distributors in the local market — they’re responsible for marketing and promotion,” Michaels says.
The company gives the responsibility for messaging products to local teams on the ground, and Michaels says its been important to keep open lines of communication and to check in with local legal experts if anyone is unsure of what local regulations are.
“It’s an ongoing conversation that we have — that’s the key with any of our regions, we’re finding, in successful and high growth regions. It’s an open dialogue,” she says.
Letting those on the ground lead the conversation on any changing regulations is important, but Michaels says that in broad terms, the messaging for b.box doesn’t change from country to country.
Rather than claiming that the company’s products are the best in the region, the brand prefers to speak to China’s interest in Australia’s products as being of high quality and trustworthy.
“In China, customers are very much about trust and faith in a brand,” she says.
“Because Australian products are recognised as quality, that’s why they’re attractive, and so our messaging to them is we have that high quality.”
The Department of Trade provides entry-level information and advice for SMEs considering an expansion into the Chinese market. Its most recent e-commerce guide can be found here.